Shoppers wait in the check out line at a Toys R Us, in New York. Toy retailer Toys R Us Inc. said Monday it is introducing a layaway program for larger ticket-items such as bikes and cribs, ahead of the holiday season. (The Associated Press)

Toys "R" Us, the largest U.S. toy store chain, said it is cooperating with a Federal Trade Commission antitrust inquiry into its relationship with suppliers.

The FTC is looking into issues first raised in a lawsuit in 2005 against the company, Wayne, N.J.-based Toys "R" Us said in an e-mailed statement Monday.

"The inquiry is associated with a lawsuit filed nearly four years ago," Toys "R" Us said. "Most importantly, we believe the lawsuit's claims are entirely without merit."

Internet retailers, including Babyage.com Inc., sued Babies "R" Us in 2005, alleging the company conspired with baby-product manufacturers to limit discount pricing on certain items. The suit has since been consolidated with a separate class-action case filed by consumers in January 2006.

The Internet retailers claim Toys "R" Us threatened to cut off product suppliers if they charged less than agreed minimum prices. The consumers said they paid inflated prices for some Babies "R" Us products.

Lawyers in both cases say they are in touch with the FTC.

"I can confirm that the FTC contacted me," said Elizabeth Fegan of Oak Park, Ill., who is representing consumers in their class-action suit. Kendall Zylstra of Huntington Valley, Pa., who represents competing retailers, said he has also talked to the FTC about the antitrust allegations.

Zylstra said his clients are cooperating with a request from the FTC for information they produced for the

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lawsuit against Toys "R" Us. He said he plans to deliver the information later this week.

FTC spokeswoman Claudia Bourne Farrell declined to comment.